FuelCell
Energy and POSCO Power Sign License Agreement to Localize Products for South
Korean Market
South Korea's POSCO
Power Includes Upfront License Fee of $10 Million and Invests $25 Million in
FuelCell Energy Common Stock
DANBURY, Conn., Oct.
28, 2009 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc. (Nasdaq:FCEL), a leading
manufacturer of high efficiency ultra-clean power plants using renewable and
other fuels for commercial, industrial, government, and utility customers,
today announced the signing of a Licensing Agreement allowing POSCO Power to
manufacture fuel cell stack modules from cell and module components provided
by FuelCell Energy. These fuel cell modules will be combined with
balance-of-plant manufactured in South Korea to complete
electricity-producing fuel cell power plants for sale in South Korea. The
License Agreement includes an upfront license fee of $10 million which was
paid at signing as well as an ongoing royalty, initially set at 4.1% of the
revenues generated by sales of the fuel cell stack modules by POSCO Power. Additionally,
POSCO Power closed on its previously announced purchase of $25 million in
FuelCell Energy common stock at a purchase price of $3.59 per share, the
price agreed to on June 9, 2009.
Direct FuelCell (DFC)
power plants generate electricity directly for South Korea's power grid. As
part of a drive to establish fuel cells as its country's leading form of
alternative energy, POSCO Power has ordered more than 68 megawatts (MW) of
FuelCell Energy's DFC units to date and built a facility to manufacture
balance-of-plant systems in South Korea.
Currently,
approximately 23 MW of FuelCell Energy power plants are installed in South
Korea, including six DFC3000 megawatt-class power plants. Sites include POSCO
Power's headquarters and balance-of-plant manufacturing facility in Pohang; a
paper company Natura; independent power producers HS Holdings and MPC; and
electric utilities KOMIPO, KOSEP, and EWP, which are members of the KEPCO
family of companies in South Korea.
South Korea has
committed 2 percent of its gross national product to clean energy projects --
more than any other developed country. FuelCell Energy power plants operating
on natural gas and biogases enable South Korean utilities to comply with the
country's aggressive clean electricity targets because they emit near-zero
pollutants and they are a low-carbon solution. DFC power plants also meet
South Korea's need for green technologies that contribute to increased
domestic employment. Currently, South Korea is pursuing the passage of an
$85.8 billion renewable energy plan that includes a renewable portfolio
standard (RPS) mandating 11 percent clean energy by 2030 -- a total of 7,150
MW -- which includes fuel cells on natural gas and further increases the
market potential for DFC power plants.
"POSCO Power is
excited to enter into a new stage of partnership with FuelCell Energy,"
said Soung-Sik Cho, President and CEO of POSCO Power. "We view the
partnership with FuelCell Energy as critical to accomplishing our goal to
make South Korea a world leader in clean energy technology."
Under the agreement,
POSCO Power will manufacture fuel cell modules from components and cells
manufactured in the U.S. by FuelCell Energy, in a new facility it intends to
construct adjacent to its current fuel cell balance-of-plant operation in
Pohang. FuelCell Energy will provide training for POSCO Power personnel.
"Our strategy is
to localize certain power plant manufacturing to reduce cost and ensure our
products meet the specific needs of individual markets," said R. Daniel
Brdar, Chairman and CEO of FuelCell Energy. "As POSCO Power increases
its plant output, the demand for our fuel cell components increases. Increased
demand in South Korea will drive expansion of our manufacturing plant in
Connecticut and additional jobs."
At 47 to 60 percent
electrical efficiency, DFC power plants are more efficient than any
combustion-based technologies in their size range. Improved efficiency
translates into more electricity for less fuel, while significantly reducing
CO2. The result is fuel cost savings while generating ultra-clean electricity
that meets South Korea's low-carbon objectives.
About FuelCell Energy
FuelCell Energy is the
world leader in the development and production of stationary fuel cells for
commercial, industrial, municipal and utility customers. FuelCell Energy's
ultra-clean and high efficiency DFC(R) fuel cells are generating power at
over 55 locations worldwide. The company's power plants have generated over
340 million kWh of power using a variety of fuels including renewable
wastewater gas, biogas from beer and food processing, as well as natural gas
and other hydrocarbon fuels. FuelCell Energy has partnerships with major
power plant developers and power companies around the world. The company also
receives funding from the U.S. Department of Energy and other government
agencies for the development of leading edge technologies such as fuel cells.
For more information please visit our website at www.fuelcellenergy.com
This news release contains forward-looking statements, including
statements regarding the Company's plans and expectations regarding the
continuing development and commercialization of its fuel cell technology. All
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected. Factors that could
cause such a difference include, without limitation, general risks associated
with product development, manufacturing, changes in the regulatory
environment, customer strategies, potential volatility of energy prices,
rapid technological change, competition, and the Company's ability to achieve
its sales plans and cost reduction targets, as well as other risks set forth
in the Company's filings with the Securities and Exchange Commission. The
forward-looking statements contained herein speak only as of the date of this
press release. The Company expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any such statement to reflect
any change in the Company's expectations or any change in events, conditions
or circumstances on which any such statement is based.
Direct FuelCell, DFC, DFC/T and FuelCell Energy, Inc. are all
registered trademarks of FuelCell Energy, Inc. DFC-ERG is a registered
trademark jointly owned by Enbridge, Inc. and FuelCell Energy, Inc.
CONTACT: FuelCell Energy, Inc.
Lisa Lettieri
(203) 830-7494
ir@fce.com